Blending Modern Technology with Clyde-Built Craftsmanship A Word from Our CEO Gerry Marshall

A growing pipeline and diversification into key markets

Firstly, I would like to start by expressing my appreciation to Clyde Blowers Capital for their continued support and vision to help us diversify the business and secure the long-term future of the yard. I would also like to thank the Scottish Government for the recent funding facility which will enable us to implement our diversification strategy and capitalize on a huge array of exciting opportunities in a range of markets such as marine defence, ship repair, fishing vessels, decommission work, major fabrication and deployable resources.

I am extremely proud of the tremendous progress made by the team here at and have seen an astonishing advancement with innovation, first with the development of green propulsion technologies and then moving onto hydrogen powered vessels. Our recent announcement on securing the funding to lead a European consortium to develop the world’s first hydrogen-powered ferry is testament to the incredibly talented and innovative team we have here in Port .

Furthermore, I’m delighted to say that we have continued to strengthen our management team with key appointments aimed to capture new business and cement our position as a world leader in marine engineering technology.

The extensive and impressive redevelopment taken place at the yard in the last 12 months, coupled with an ever-growing pipeline of opportunities, signals exciting times ahead for all at Ferguson Marine as we strive to bring commercial shipbuilding back to the Clyde. Ferguson Marine Engineering Joins Bid for £1.25bn MOD Contract

Ferguson Marine Engineering is delighted to announce they are officially part of ‘Babcock Team 31’ as the Team unveiled the Arrowhead 140 as its design for the UK Ministry of Defence’s (MOD) new £1.25 billion Type 31e general purpose light frigate programme on May 31st.

Launching the new platform, ‘Team 31’ – led by Babcock and at Babcock Rosyth in Fife, optimises the partners’ first-class UK including fellow industry experts Ferguson Marine, Thales, facilities, innovation and skills whilst cleverly ensuring capacity OMT, BMT and – underlined the vessel’s for parallel programmes remains. All of which is geared to established, ‘at sea’ design baseline which can be developed to generate a genuine resurgence in shipbuilding across the UK and meet global requirements. when coupled with the virtual design alliance between Babcock, OMT and BMT it squarely supports the intent of the National With UK engineering at its core, and developing OMT’s Iver Shipbuilding Strategy. Huitfeldt hull form currently in-service for the Royal Danish Navy, Arrowhead 140 will lower programme risks through its Based on Arrowhead 140, Team 31 can build modern platforms tried and tested baseline design and is engineered to minimise that navies can use to tailor to their own specifications and when through-life costs whilst delivering a truly leading edge frigate. you add world leading experience in naval platform in-service support with a deep understanding of support cost drivers, Arrowhead 140’s distributed build and assembly approach, Babcock Team 31 offers a glimpse into an exciting new world comprising Ferguson Marine on the Clyde, Babcock Appledore of UK and international ship build delivery and intelligent ship in North Devon, Harland and Wolff in Belfast with integration support with Arrowhead 140. The Rebirth of Commercial Shipbuilding on The Clyde Redevelopment paves the way to an exciting future for Ferguson Marine

Since Ferguson Shipbuilders was rescued from administration in 2014 by the engineering investment firm, Clyde Blowers Capital, led by Jim McColl, the transformation that has taken place in just three and a half years has been nothing short of miraculous. At the same time as completely demolishing the old yard and replacing it with a stunning, state of the art marine engineering complex, there was the small matter of building and launching CalMac’s MV Catriona, the third Hybrid battery ferry to be built by the yard that gave the world its first Hybrid in 2012. The MV Catriona was launched in 2015 and impressively delivered 6 weeks ahead of schedule in 2016.

In response to this amazing story of transformation, the total employees has now risen to approximately 350, with more on the way over the course of 2018. Included in the revitalised workforce are no fewer than 38 apprentices, with a further intake planned for this summer. Yet another sign that Ferguson Marine is looking to the future, not only for itself and its employees but for the communities of , wider Inverclyde and the river that started it all, over 500 years ago.

The last commercial shipbuilder on the has seen a £25 million investment and the yard is totally unrecognisable from the aging facility inherited in 2014, as the company strive to bring back the glory days to the Clyde.

In its place, one of the world’s most advanced now proudly graces the Port Glasgow waterfront. The entrance into the revitalised town is marked by a stunning new office block, shoulder to shoulder with one of Europe’s largest module halls, built to allow the construction of tiered vessel blocks under cover - something that will be essential for the potential work on any new vessel for the Royal Navy, now a distinct possibility as the new Ferguson Marine competes for a share in the creation of the all new Type 31e Frigates. Before

After A £25m Investment Has Seen an Incredible Transformation

• Awarded EU grant funding to design and construct the world’s first hydrogen powered ferry

• Increased working area from 39,000 to 113,000 sq ft

• Increased weekly output from 13 to 150 tonnes

• Increased yard capacity

• Launched the first LNG fuelled ferry designed and constructed in the UK

• Successfully launched hybrid battery vessel, MV Catriona, 6 weeks ahead of schedule

All have helped to develop a modern, capable, world-class Pushing the Boundaries of Innovation Ferguson Marine to develop world’s first renewables-powered hydrogen ferry - HySeas III

Over the past few years Ferguson Marine has pushed the boundaries of innovation, particularly in the development of green propulsion technologies – first diesel-electric hybrid and then liquefied natural gas, demonstrated by the recent successful launches of MV Catriona and MV Glen Sannox. Next on the hit-list is hydrogen, a gaseous fuel that can be produced using curtailed renewable energy, stored and then used on board a zero-emission vessel with fresh water as the only by-product. The first of these, HyDIME, will see Ferguson Marine working with our project partners to install a small hydrogen injection system on board an existing vessel within the next year, reducing the carbon footprint of the vessel while at the same time allowing us to learn all about the challenges involved with storing and using hydrogen gas on board a ship.

This will put us in a fantastic position to deliver HySEAS III, a much more significant project that will deliver the world’s first zero emission seagoing passenger ferry powered entirely by hydrogen developed from renewable sources, designed and built in Port Glasgow by the Ferguson Marine team. This is ground- breaking technology that once again positions us at the forefront of marine innovation, leading the world in the race to develop sustainable and affordable zero-emission marine transport.

There is a growing interest in the potential of hydrogen powered vessels within both Scottish and UK governments, as well as among industry players and research institutions, and we face a unique moment of opportunity for positioning Ferguson Marine Engineering as the hydrogen leaders in the maritime sector.

With this as the goal we have developed two significant hydrogen projects, and are delighted to announce that both have been successful in attracting the necessary funding to allow them to go ahead. Ground-Breaking New Vessel Launched

On Tuesday 21st November 2017 at the Ferguson Marine shipyard First Minister, Nicola Sturgeon officially announced the successful launch of the MV Glen Sannox. The environmentally-friendly, vehicle passenger ferry is the first of two vessels which are the first LNG fuelled ferries designed and constructed in the UK, demonstrating Ferguson’s cutting- edge design and building capabilities. Today represents another landmark in the impressive Ferguson “Marine growth journey as we look to bring back shipbuilding to the Clyde. Significant investment has been made into the

yard, capabilities and skills. The successful launch of MV Glen

Sannox is further confirmation of the vast capabilities we

can now offer in Port Glasgow. I would like to thank all of our

workforce and subcontractors for their significant efforts in

ensuring the successful launch and also their commitment to ensuring“ we continue to develop the company into a world

leading shipbuilding and marine engineering business.

Gerry Marshall, Chief Executive of Ferguson Marine

The successful launch of the MV Glen Sannox marks an

“important milestone in Ferguson Marine’s journey to becoming

a world-class shipyard. As this is the first ferry in the UK

capable of being run on liquefied natural gas (LNG) and marine gas oil,“ not only has this been an extremely exciting and

ambitious project for both FMEL and CMAL, but it has been an

extremely complex one as well.

Jim McColl, Founder, Chairman & CEO of Clyde Blowers Capital Michael Makes It Two Years in a Row for Ferguson Marine

History repeated itself last month, when Project Planner Upon receiving the award, Michael commented: Michael Sinclair, our first Graduate level apprentice, picked up the 2018 Hammermen Certificate. Michael’s was actually the

second FMEL Hammermen Award, with apprentice Jennifer It’s a great honour to be recognised for my university Mackay picking up the accolade in 2017.

“studies and the work I carry out in the marine engineering field. This prestigious recognition is awarded each year to the one “ person the Hammermen see as offering the greatest potential in It shows my company and the rest of the engineering the shipbuilding industry. industry just how good this course is. World-Class Standards

Having set ourselves the target of achieving the highest and expand their range of approvals, from light gauge TIG possible standards as an accepted principle, we are now welding to MIG/MAG welding in excess of 100mm in thickness. continually signing off owners’ and classification surveys without defect or non-conformance, demonstrating the Also, formalising the survey and workshop instruction standards empowering Right-First-Time culture that is now the norm on- ensures we have repeatable processes and by continuously site. challenging how we do business, we have introduced modern ‘know how’ and equipment, leading to increased production The days of the “Hammers ding dong” as the song of the Clyde efficiency and higher quality standards. For example, being the have long since passed into history with the ever-improving introduction of a suite of flexible vacuum box testing equipment sophistication of advanced welding techniques now producing to weld-free joint faring aids. a standard of vessel construction that was only dreamed of in those pioneering days. By empowering our workforce to continually review and refine our processes, we will continue to see huge quality Quality is key to welding procedures and welder qualification and improvements which will become the norm. testing is completed and controlled entirely within our in-house training centre.

Here, the most experienced craftsman and the latest apprentices work side by side, with the opportunity to continuously upskill Our Mobile Team on the Scene

In March, Ferguson Marine launched a brand-new service which has already proved to be a runaway success.

The Ferguson Marine, Man-in-a-Van concept, is a new turnkey Our Mobile Team on the Scene taskforce leader, David service offering all the engineering skills and maintenance Henderson said, expertise of the Port Glasgow yard, delivered to the customer’s door - anywhere in Scotland, or the UK. “We offer a turnkey service, bringing new construction standards to ship repair, indeed any engineering task, offsite. Already the first van in a planned fleet has travelled as far south as Blyth in Southeast Northumberland, to Rosyth on the East The standards we work to are the same demanding standards we set coast to Lochboisdale in the , delivering either for ourselves in the yard and we challenge our own performance with welcome reinforcements to pressurized engineering teams or a QC surveys of every job. I’m glad to say, with successful results on solution to an engineering task, where one didn’t previously exist. every project so far.

Ranging from ship repair services to major painting and blasting With the nature of the tasks we have undertaken to date, we see how operations on complex engineering projects. From specialist vital it is to offer customers a quick response job done on time and on jigs to site maintenance and refurbishment activities, fully budget. supported in all aspects from our in-house teams across design and procurement to engineering and fabrication, from non- I don’t know of any other competitor that offers this kind of service destructive testing to finishing trades, outfitting and joiner with this level of quality control.” services. Investing in Our Future

At Ferguson Marine, we recognise our workforce to be our biggest asset. Which is why we are more committed than ever to recruiting and developing the very best in the business, across all age groups and all levels of skill.

In September 2014, the rescued shipyard had only seven the shipyard. After three years of mixed college and shipyard employees. By December, key workforce had been recalled and experience, they have the opportunity to progress on to higher that number had risen to 47, with an average age of 58 - welcome education. All apprentices work in the yard with experienced experience for a new start but not offering many long-term mentors, developing knowledge, gaining practical experience and prospects. Since then, a combination of aggressive but selective honing all-important interpersonal skills. recruitment and the addition of new apprentices has brought the current workforce to approximately 350, dramatically reducing We have also successfully extended the Apprenticeship the average age to 46. Our expectation is for 500 employees programme to Graduate level - the only program of its kind in by 2020, laying a long-term skills foundation to take Ferguson Inverclyde, creating the opportunity to obtain further education Marine into the next decade. up to Masters level. This was recognised by Investors in Young People (IIYP) who have recommended Ferguson Marine to An Exceptional Apprenticeship progress on to IIYP Silver Framework. Working hand in hand with West College Scotland, we have been able to afford our growing number of Modern Apprentices the Our award-winning apprenticeship scheme has been crucial in opportunity to absorb the disciplines and value of learning, mixed achieving our growth aims and we can’t wait to see their progress with the practical experience of one-to-one mentoring within as they rise through the ranks at Ferguson Marine. Ferguson Marine, Newark Works, Castle Road, Port Glasgow, Scotland, PA14 5NG